I do not favor a policy of acquisition of new and distant territory or the incorporation of remote interests with our own.

The laws of progress are vital and organic, and we must be conscious of that irresistible tide of commercial expansion which, as the concomitant of our active civilization, day by day, is being urged onward by those increasing facilities of production, transportation, and communication to which steam and electricity have given birth; but our duty in the present instructs us to address ourselves mainly to the development of the vast resources of the great area committed to our charge, and to the cultivation of the arts of peace within our own borders, though jealously alert in preventing the American hemisphere from being involved in the political problems and complications of distant governments. Therefore, I am unable to recommend propositions involving paramount privileges of ownership or right outside of our own territory, when coupled with absolute and unlimited engagements to defend the territorial integrity of the state where such interests lie. While the general project of connecting the two oceans by means of a canal is to be encouraged, I am of opinion that any scheme to that end to be considered with favor should be free from the features alluded to. The Tehuantepec route is declared, by engineers of the highest repute and by competent scientists, to afford an entirely practicable transit for vessels and cargoes, by means of a ship-railway, from the Atlantic to the Pacific. The obvious advantages of such a route, if feasible, over others more remote from the axial lines of traffic between Europe and the Pacific, and, particularly, between the valley of the Mississippi and the western coast of North and South America, are deserving of consideration.

Whatever highway may be constructed across the barrier dividing the two greatest maritime areas of the world must be for the world's benefit, a trust for mankind, to be removed from the chance of domination by any single power, nor become a point of invitation for hostilities or a prize for warlike ambition. An engagement combining the construction, ownership, and operation of such a work by this Government, with an offensive and defensive alliance for its protection, with the foreign state whose responsibilities and rights we would share, is, in my judgment, inconsistent with such dedication to universal and neutral use, and would, moreover, entail measures for its realization beyond the scope of our national polity or present means.

The lapse of years has abundantly confirmed the wisdom and foresight of those earlier administrations which, long before the conditions of maritime intercourse were changed and enlarged by the progress of the age, proclaimed the vital need of interoceanic transit across the American Isthmus and consecrated it in advance to the common use of mankind by their positive declarations and through the formal obligation of treaties. Toward such realization the efforts of my administration will be applied, ever bearing in mind the principles on which it must rest, and which

were declared in no uncertain tones by Mr. Cass, who, while Secretary of State, in 1858, announced that "What the United States want in Central America, next to the happiness of its people, is the security and neutrality of the interoceanic routes which lead through it."

The construction of three transcontinental lines of railway all in successful operation, wholly within our territory and uniting the Atlantic and the Pacific Oceans, has been accompanied by results of a most interesting and impressive nature, and has created new conditions, not in the routes of commerce only, but in political geography, which powerfully affect our relations toward, and necessarily increase our interests in, any transisthmian route which may be opened and employed for the ends of peace and traffic, or, in other contingencies, for uses inimical to both.

Transportation is a factor in the cost of commodities scarcely second to that of their production, and weighs as heavily upon the consumer. Our experience already has proven the great importance of having the competition between land carriage and water carriage fully developed, each acting as a protection to the public against the tendencies to monopoly which are inherent in the consolidation of wealth and power in the hands of vast corporations.

These suggestions may serve to emphasize what I have already said on the score of the necessity of a neutralization of any interoceanic transit; and this can only be accomplished by making the uses of the route open to all nations and subject to the ambitions and warlike necessities of none.

The drawings and report of a recent survey of the Nicaragua Canal route, made by Chief Engineer Menocal, will be communicated for your information.

The claims of citizens of the United States for losses by reason of the late military operations of Chile in Peru and Bolivia are the subject of negotiation for a claims convention with Chile, providing for their submission to arbitration.

The harmony of our relations with China is fully sustained.

In the application of the acts lately passed to execute the treaty of 1880, restrictive of the immigration of Chinese laborers into the United States, individual cases of hardship have occurred beyond the power of the Executive to remedy, and calling for judicial determination.

The condition of the Chinese question in the Western States and Territories is, despite this restrictive legislation, far from being satisfactory. The recent outbreak in Wyoming Territory, where numbers of unoffending Chinamen, indisputably within the protection of the treaties and the law, were murdered by a mob, and the still more recent threatened outbreak of the same character in Washington Territory, are fresh in the minds of all, and there is apprehension lest the bitterness of feeling against the Mongolian race on the Pacific slope may find vent in simi

lar lawless demonstrations. All the power of this Government should be exerted to maintain the amplest good faith toward China in the treatment of these men, and the inflexible sternness of the law in bringing the wrong-doers to justice should be insisted upon.

Every effort has been made by this Government to prevent these violent outbreaks and to aid the representatives of China in their investigation of these outrages; and it is but just to say that they are traceable to the lawlessness of men not citizens of the United States engaged in competition with Chinese laborers.

Race prejudice is the chief factor in originating these disturbances, and it exists in a large part of our domain, jeopardizing our domestic peace and the good relationship we strive to maintain with China.

The admitted right of a government to prevent the influx of elements hostile to its internal peace and security may not be questioned, even where there is no treaty stipulation on the subject. That the exclusion of Chinese labor is demanded in other countries where like conditions prevail is strongly evidenced in the Dominion of Canada, where Chinese immigration is now regulated by laws more exclusive than our own. If existing laws are inadequate to compass the end in view, I shall be prepared to give earnest consideration to any further remedial measures, within the treaty limits, which the wisdom of Congress may devise.

The Independent State of the Congo has been organized as a government, under the sovereignty of His Majesty the King of the Belgians, who assumes its chief magistracy in his personal character only, without making the new State a dependency of Belgium. It is fortunate that a benighted region, owing all it has of quickening civilization to the beneficence and philanthropic spirit of this monarch, should have the advantage and security of his benevolent supervision.

The action taken by this Government last year in being the first to recognize the flag of the International Association of the Congo has been followed by formal recognition of the new nationality which succeeds to its sovereign powers.

A conference of delegates of the principal commercial nations was held at Berlin last winter to discuss methods whereby the Congo Basin might be kept open to the world's trade. Delegates attended on behalf of the United States on the understanding that their part should be merely deliberative, without imparting to the results any binding character, so far as the United States were concerned. This reserve was due to the indisposition of this Government to share in any disposal by an international congress of jurisdictional questions in remote foreign territories. The results of the conference were embodied in a formal act of the nature of an international convention, which laid down certain obligations purporting to be binding on the signatories, subject to ratification within one year. Notwithstanding the reservation under

which the delegates of the United States attended, their signatures were attached to the general act in the same manner as those of the plenipotentiaries of other governments, thus making the United States. appear, without reserve or qualification, as signatories to a joint international engagement imposing on the signers the conservation of the territorial integrity of distant regions where we have no established. interests or control.

This Government does not, however, regard its reservation of liberty of action in the premises as at all impaired; and holding that an engagement to share in the obligation of enforcing neutrality in the remote valley of the Congo would be an alliance whose responsibilities. we are not in a position to assume, I abstain from asking the sanction. of the Senate to that general act.

The correspondence will be laid before you, and the instructive and interesting report of the agent sent by this Government to the Congo, country, and his recommendations for the establishment of commercial' agencies on the African coast are also submitted for your consideration.

The commission appointed by my predecessor last winter to visit the Central and South American countries and report on the methods of enlarging the commercial relations of the United States therewith has submitted reports, which will be laid before you.

No opportunity has been omitted to testify the friendliness of this Government toward Corea, whose entrance into the family of treaty powers the United States were the first to recognize. I regard with favor the application made by the Corean Government to be allowed to employ American officers as military instructors, to which the assent of Congress becomes necessary, and I am happy to say this request has the concurrent sanction of China and Japan.

After

The arrest and imprisonment of Julio R. Santos, a citizen of the United States, by the authorities of Ecuador, gave rise to a contention with that government, in which his right to be released or to have a speedy and impartial trial on announced charges and with all guaranties of defense stipulated by treaty was insisted upon by us. an elaborate correspondence and repeated and earnest representations on our part Mr. Santos was, after an alleged trial and conviction, eventually included in a general decree of amnesty and pardoned by the Ecuadorian Executive and released, leaving the question of his American citizenship denied by the Ecuadorian Government but insisted upon by our own.

The amount adjudged by the late French and American Claims Commission to be due from the United States to French claimants on account of injuries suffered by them during the war of secession, having been appropriated by the last Congress, has been duly paid to the French Government.

The act of February 25, 1885, provided for a preliminary search of the records of French prize courts for evidence bearing on the claims of American citizens against France for spoliations committed prior to 1801. The duty has been performed, and the report of the agent will be laid before you.

I regret to say that the restrictions upon the importation of our pork into France continue, notwithstanding the abundant demonstration of the absence of sanitary danger in its use; but I entertain strong hopes that, with a better understanding of the matter, this vexatious prohibition will be removed. It would be pleasing to be able to say as much with respect to Germany, Austria, and other countries, where such food-products are absolutely excluded, without present prospect of reasonable change.

The interpretation of our existing treaties of naturalization by Germany during the past year has attracted attention by reason of an apparent tendency on the part of the Imperial Government to extend the scope of the residential restrictions to which returning naturalized citizens of German origin are asserted to be liable under the laws of the empire. The temperate and just attitude taken by this Government with regard to this class of questions will doubtless lead to a satisfactory understanding.

The dispute of Germany and Spain relative to the domination of the Caroline Islands has attracted the attention of this Government, by reason of extensive interests of American citizens having grown up in those parts during the past thirty years, and because the question of ownership involves jurisdiction of matters affecting the status of our citizens under civil and criminal law. Whilst standing wholly aloof from the proprietary issues raised between powers to both of which the United States are friendly, this Government expects that nothing in the present contention shall unfavorably affect our citizens carrying on a peaceful commerce or there domiciled, and has so informed the Governments of Spain and Germany.

The marked good will between the United States and Great Britain has been maintained during the past year.

The termination of the fishing clauses of the treaty of Washington, in pursuance of the joint resolution of March 3, 1883, must have resulted in the abrupt cessation on the 1st of July of this year, in the midst of their ventures, of the operations of citizens of the United States engaged in fishing in British-American waters, but for a diplomatic understanding reached with Her Majesty's Government in June last, whereby assurance was obtained that no interruption of those operations should take place during the current fishing season,